French economy likely to expand slightly stronger in Q2 2017

The French economy recorded a 0.3 percent growth on a sequential basis in the first quarter of this year, according to the first estimate of Insee. Even if this performance is slightly below the level indicated by economic surveys, it is not surprising. It affirms the downside risk to the projection of 0.4 percent quarter-on-quarter, as hinted by the poor monthly economic figures for January and February, noted BNP Paribas in a research report.

The prospects for the second quarter economic growth are expected to be similar or slightly stronger. The first available indicators are rather upbeat. Business sentiment surveys are high and are trending upwards, which augurs well for near-term growth prospects. The surveys imply that the second quarter growth rate might be at least as robust as in the first quarter. Looking at the foreseeable changes in the main components of growth based on first quarter results, the same conclusion follows. Household consumption and exports have rebounded, a payback in corporate investment while household investment might continue to recover at a rapid pace.

According to INSEE, the French economy is expected to expand 0.5 percent in the second quarter of this year.